Informal sector registers 20 percent growth in 2007: seminar told

Pakistan has a very large informal sector in which 20 percent growth was recorded in 2007. According to a conservative estimate in 2007, out of $160 billion size of country's economy, $32 billion plus is in the informal sector. These were the findings of a report. "The informal sector, social protection and the state budget" by Dr Rubina Saigol which were discussed in the seminar organised by HomeNet Pakistan on Thursday.

According to the findings an approximate assessment shows that 32 percent of the informal workforce is in the wholesale and retail business, 21 percent in the manufacturing sector, 17.5 percent in community and social and personnel sector, 13.8 percent in construction and 11.1 percent in the transport sector. This estimate included both in urban and rural areas.

Adnan Adil said that Pakistan's low ratings on women's equality, labourers' rights and social development are not merely due to the short-sightedness of the particular governments. They are rooted in historical and structural inequalities in the political economy of production, distribution and consumption. They are connected to the historical feudal, tribal, capitalist and patriarchal structures, combined with civil military and centre province contradictions that impede the equitable distribution of social, economic and political goods in society.

The informal sector comprises small units that produce goods or services with the primary objective of generating employment and incomes for the families engaged in these activities. Informal activities have often been characterised by low levels of capital, skills, diminished access to organised markets and technologies; low and unstable incomes and poor and unpredictable working conditions.

Such activities are often outside the scope and purview of the official statistical enumeration and government regulations, while also eluding the formal system of social protection. The units operating in the informal sector are highly labour intensive but employment is mostly casual, and based on kinship or personal relations rather than contractual arrangements ensuring protection. The informal sector activities depend, to a large extent, on the local and regional demand. There is a preponderance of women in the various informal sectors of employment.

While women's labour force participation has enhanced over time, and there was a sharp increase in their unemployment from 1 to 10 per cent, this was accompanied by 40 percent decline in self-employment. Women are much more disadvantaged in work than men and get employment where they are vulnerable and there is no decent employment. They are employed mainly in the informal sectors of the economy and constituted 71.7 percent of the workforce in 2008.

According to official data, more than three-fourths of the employees' monthly income is less than 1500 rupees. Over a quarter of males and two-thirds of females have a monthly income of less than 2500 rupees. The regional analysis shows that a higher proportion of females earn less than minimum wage in both urban and rural areas as compared to males. The exceedingly low official labour force participation rates for women from 3 percent in 1981 to 11 percent in the Labour Force Survey, 1986-87 overlook the large scale employment of women in informal sector jobs.